What is the Value of a Financial Advisor?

Linson

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Linson Chen

Financial Advisor & Portfolio Manager

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While investing is an important aspect of the job, good financial advisors will distinguish themselves through the advice and the service aspect of the relationship. It is common for people to equate investing with financial planning. Investing is just one aspect of what we do at RGF Integrated Wealth Management.

There are other ways to help a client grow their net worth and maximize their financial life beyond investment returns such as tax planning, increasing charitable dollars, effective debt management, estate planning transfers, and avoiding costly money mistakes. So how does one determine the value received by working with a financial advisor? Research done by Envestnet (2014), Vanguard (2015), and Russell Investments (2020) has estimated that clients working with a financial advisor receive an additional 3% per year in value. The value of a financial advisor goes beyond what is shown on your account statement, as some of our advice is not easily quantified into a dollar or percentage figure. Here are the ways that a financial advisor can add value to your life.

The Financial Planner An advisor that practises financial planning takes a complete holistic view of your family’s entire situation to ensure fundamental areas such as investment planning, retirement planning, tax planning, risk management, and estate planning are being considered in your overall situation. This allows us to take advantage of opportunities to maximize value for you and your family. A written plan improves the likelihood of reaching your financial goals, and acts as a blueprint to guide you and your family through significant decisions. A financial plan is not a one-time event; for it to be effective, the plan requires ongoing monitoring and revising to adapt to changes in circumstances and needs.

Your Financial Advocate A trusted partner in your corner to help. Someone who represents and looks out for your best interests. This means always putting the interests of the client first. Giving you peace of mind, allowing you more time to focus on what is most important to you. Let us worry about your finances for you.

Accountability Partner Individual financial success is not driven by the performance of the markets but by the behaviour of individual investors. We provide accountability in working toward long-term goals and ensuring your financial house is in order. Partnering with a financial advisor helps you build greater confidence and commitment toward achieving your goals. Advisors can help improve savings discipline and keep clients focused on the big picture.

The Navigator Advisors help clients prepare for what they do not see coming. An advisor can point out hidden risks and manage them ahead of time. We also help clients avoid costly mistakes by working with them to anticipate upcoming life events and financially prepare for them.

The Sounding Board With an understanding of your family’s situation, advisors provide the necessary information and options to help guide you through different transitions in life. Key life events may include: the sale of a business, succession planning, retirement, divorce, death, weddings, birth, career transitions, remarriage, and blended families. We are the voice of reason giving you the confidence and the appropriate tools to make major life decisions.

The Circuit Breaker Emotions and money often do not mix well. Advisors act as a barrier to prevent clients from doing the wrong thing at the wrong time. We help steer clients away from the impulse to chase returns or sell in volatile markets. Acting objectively, we bring outside insight to help avoid emotionally driven life decisions.

Teacher A good financial advisor will simplify and explain financial concepts in plain English. We will explore the information needed to succeed in your situation. We educate clients to learn good investing habits that prevent trying to time the market and avoid making emotional investment decisions.

Maximize Your Life We will work to help you achieve the best life possible. This is the fine balance between saving for the future and enjoying the present. For retirees, this can be the balance between withdrawing too much and risk running out of money or withdrawing too little and not being able to fully enjoy life.

Consolidation Reducing the number of places where you keep your assets and information simplifies administration and makes it easier for clients to access everything. Clients are willing to pay to have all their financial statements, investments, risk management, and planning consolidated. This is especially valuable for a client’s spouse and family if something were to happen to them. How much value do you place on the items listed above? Speak with your RGF advisor to learn more. ■